HOUSE STATE AFFAIRS STANDING COMMITTEE February 25, 1999 8:09 a.m. MEMBERS PRESENT Representative Jeannette James, Chair Representative Scott Ogan Representative Jim Whitaker Representative Bill Hudson Representative Beth Kerttula Representative Harold Smalley MEMBERS ABSENT Representative John Coghill COMMITTEE CALENDAR CONFIRMATION HEARINGS Department of Administration Robert Poe, Commissioner, Department of Administration - CONFIRMATION ADVANCED Department of Military and Veterans Affairs - POSTPONED HOUSE BILL NO. 80 "An Act relating to a state employment preference for certain members of the Alaska National Guard." - MOVED CSHB 80(STA) OUT OF COMMITTEE HOUSE BILL NO. 45 "An Act relating to initiative and referendum petitions; and providing for an effective date." - MOVED CSHB 45(STA) OUT OF COMMITTEE HOUSE JOINT RESOLUTION NO. 7 Proposing an amendment to the Constitution of the State of Alaska relating to initiative and referendum petitions. - MOVED CSHJR 7(STA) OUT OF COMMITTEE (* First public hearing) PREVIOUS ACTION BILL: HB 80 SHORT TITLE: EMPLOYMENT PREFERENCE FOR NAT'L GUARD SPONSOR(S): REPRESENTATIVES(S) MORGAN, Foster, Kapsner, Masek, Harris, Kott, Mulder, Croft, Dyson, Coghill, Rokeberg, Phillips, Murkowski, Halcro Jrn-Date Jrn-Page Action 2/03/99 133 (H) READ THE FIRST TIME - REFERRAL(S) 2/03/99 133 (H) MLV, STATE AFFAIRS 2/05/99 147 (H) COSPONSOR(S): COGHILL, ROKEBERG, 2/05/99 147 (H) PHILLIPS 2/08/99 173 (H) COSPONSOR(S): MURKOWSKI 2/16/99 (H) MLV AT 5:00 PM CAPITOL 120 2/16/99 (H) MOVED OUT OF COMMITTEE 2/16/99 (H) MINUTE(MLV) 2/17/99 235 (H) MLV RPT 7DP 2/17/99 235 (H) DP: FOSTER, PHILLIPS, CROFT, COGHILL, 2/17/99 235 (H) KOTT, JAMES, MURKOWSKI 2/17/99 235 (H) ZERO FISCAL NOTE (ADM) 2/17/99 235 (H) REFERRED TO STA 2/23/99 (H) STA AT 8:00 AM CAPITOL 102 2/23/99 (H) HEARD AND HELD 2/24/99 308 (H) COSPONSOR(S): HALCRO 2/25/99 (H) STA AT 8:00 AM CAPITOL 102 BILL: HB 45 SHORT TITLE: INITIATIVE/REFERENDUM PETITIONS SPONSOR(S): REPRESENTATIVES(S) WILLIAMS Jrn-Date Jrn-Page Action 1/19/99 30 (H) READ THE FIRST TIME - REFERRAL(S) 1/19/99 30 (H) STATE AFFAIRS, FINANCE 2/25/99 (H) STA AT 8:00 AM CAPITOL 102 BILL: HJR 7 SHORT TITLE: CONST AM: INITIATIVE/REFERENDUM PETITIONS SPONSOR(S): REPRESENTATIVES(S) WILLIAMS Jrn-Date Jrn-Page Action 1/19/99 17 (H) READ THE FIRST TIME - REFERRAL(S) 1/19/99 17 (H) STATE AFFAIRS, JUDICIARY, FINANCE 2/11/99 (H) STA AT 8:00 AM CAPITOL 102 2/11/99 (H) HEARD AND HELD 2/11/99 (H) MINUTE(STA) 2/19/99 (H) STA AT 3:30 PM CAPITOL 102 2/23/99 (H) STA AT 8:00 AM CAPITOL 102 2/23/99 (H) HEARD AND HELD 2/25/99 (H) STA AT 8:00 AM CAPITOL 102 WITNESS REGISTER ROBERT POE, Commissioner Department of Administration P.O. Box 110200 Juneau, Alaska 99811 Telephone: (907) 456-2200 POSITION STATEMENT: Testified as appointee to the Department of Administration. REPRESENTATIVE CARL MORGAN Alaska State Legislature Capitol Building, Room 409 Juneau, Alaska 99801 Telephone: (907) 465-4527 POSITION STATEMENT: Sponsor of HB 80. BRUCE GAZAWAY, President Alaska National Guard Enlisted Association 4420 Edinburgh Drive Anchorage, Alaska 99515 Telephone: (907) 243-6779 POSITION STATEMENT: Testified in support of HB 80. BRUCE J. GABRYS, President Alaska National Guard Officer's Association 10229 Baffin Eagle River, Alaska 99577 Telephone: (907) 694-3874 POSITION STATEMENT: Testified in support of HB 80. ACTION NARRATIVE TAPE 99-9, SIDE A Number 0001 CHAIR JEANNETTE JAMES called the House State Affairs Standing Committee meeting to order at 8:04 a.m. Members present at the call to order were Representatives James, Ogan, Whitaker, Hudson, Kerttula and Smalley. CONFIRMATION HEARING: DEPARTMENT OF ADMINISTRATION Number 0010 CHAIR JAMES announced the first order of business is the confirmation of Robert Poe, Commissioner of the Department of Administration. Number 0012 ROBERT POE, Commissioner, Department of Administration, said he came to Alaska in 1981 to design the state accounting system. He said he loves Alaska and has always wanted to contribute to it. COMMISSIONER POE stated the Department of Administration has one of the biggest impacts on state government services - and the way it delivers those services. He noted he has fixed some of the more difficult problems in Alaska over the years and cited the Department of Transportation and Public Facilities's (DOT/PF) capital project cleanup, the international trade issue, and negotiations with the Federal Express at the Anchorage International Airport as examples. He said he has some skills to help government do a better job. His interest is to help things go well, to bring a practical point of view, to hear as many points of view as possible, and to be reasonable and honest to the job. CHAIR JAMES mentioned accounting is her background and noted that some changes may need to be made to the state's accounting system, given the current technology. COMMISSIONER POE replied, so far it works well. However, the current system is not very pretty. The screens and reports are complicated to read unless one has been working with it for some time. Thus, the reporting could be made a little bit friendlier and easier to look at, but the individuals that work with it every day like it. It is a solid system and has yet to be fully taxed. It was structured to look at seven different points of view simultaneously. He cited that in 1987 the legislature thought DOT/PF had misplaced approximately $350 million due to a rush of projects. The state accounting system resolved that problem. Number 0127 REPRESENTATIVE OGAN asked for his position on contract negotiations in light of the tough financial picture for the state. He asked Commissioner Poe whether the former senator [Duncan] is going to negotiate the contracts. COMMISSIONER POE replied that the former senator will be assisting with negotiations and cost reductions. These are tough financial times for the state. The Public Safety Employment Association (PSEA) agreement, which was announced yesterday, is a no-increase contract for three years. Granted, wages and benefits can be reopened in years two and three, but the state troopers, fire marshals, and airport safety officers stated they wouldn't ask for an increase because they understand the tough financial situation the state is in. They would like another chance to talk about it in the future, but the state has not made a commitment to that. Not all bargaining units, however, see that point of view. Some are more optimistic in what they might be able to secure. Nevertheless, the Department of Administration needs to deliver that tough message, and sometimes the toughest messages come from the people they trust the most - the strategy of the department. He said former-Senator Duncan understands that strategy. Number 0169 REPRESENTATIVE OGAN referred to a resolution passed last session by the legislature, and asked Commissioner Poe whether he is going for a zero net increase in contract negotiations. COMMISSIONER POE replied he can't talk about the total strategy, but the ratification process includes the legislature. The PSEA agreement hit all the requirements in the resolution point for point. REPRESENTATIVE OGAN indicated he is looking for a less contentious posture between the Administration, the legislature and the unions. COMMISSIONER POE said it is important. It is not a good guy-bad guy situation; it's individuals trying to deal with a financial situation. He doesn't see it as "us," versus "them" situation. Number 0227 REPRESENTATIVE HUDSON stated he views the Department of Administration as a consultant to the governor on administrative matters. He asked Commissioner Poe whether he has a policy on centralization versus decentralization of administrative functions in light of the growth of those agencies. For an example, the Office of Management and Budget has gone from a budget to a management perspective. He asked if the Governor talked to him about analyzing all of the administrative functions of the entire state and make a recommendation. COMMISSIONER POE replied no, the Governor has not talked to him about that yet. There is not only one good solution to any problem. When you're looking at centralization, it is important to look at the quality of service for the lowest possible cost. It doesn't always mean centralization. Whatever decision is made, as commissioner, that decision will annoy someone. Therefore, he is trying to use governance groups to help eliminate that type of annoyance. He cited the Telecommunication Information Council as an example and noted that he will use it for guidance on direction relating to computing. He also cited the Group of Administrative Services Directors as another example. It deals with administrative issues in the agencies because frequently the agency that speaks the loudest gets its way to the detriment of the other agencies. He wants the group to make a decision and agree to hold to it. He stated he believes in both centralization and decentralization. More important, he believes that individuals need to work together to solve problems. He said he is not the only person with an idea or the brains to think through the problems. REPRESENTATIVE HUDSON said it is difficult for legislators to reconfigure government to operate more efficiently and Commissioner Poe is in a key position to analyze the use of administrative services such as hiring, firing and leasing. He hopes that upon confirmation the legislature can count on him to be bold. COMMISSIONER POE said he is not afraid of hard projects, but he wants people to take responsibility for the direction of state government. He has had more success with talking about the problems and how to solve them. It doesn't matter if he knew the solution from the beginning; it is more important, when we're done, that everybody owns the solution to the problem. That is going to be his approach over and over again. Number 0365 CHAIR JAMES stated in business these days a flatter organizational chart works better and most of the things that the voters complain about - can only be done through the Administration. The legislature can only say how much money the Administration can get to do it and beyond that it is hamstrung. She asked Commissioner Poe to comment on a flatter organizational chart. COMMISSIONER POE replied he agrees with a flatter organizational chart, but not all organizations can work that way. For instance the Alaska State Troopers need a certain chain of command and that's probably important. Movement in government is not always easy because of personnel rules and labor contracts. Sometimes that's good. Government is designed to plod a little bit. He noted the legislative process isn't fast at times, while at other times it moves in a minute. Some of the more sensible solutions would have huge ramifications across the state and that needs to be taken under consideration. Commissioner Condon said there are some things that he can do to reduce the stat's costs significantly. But people could be outraged for what he has done so he needs to balance that and he is going to do his best to do that. Number 0422 CHAIR JAMES stated it is the collective group of the legislature that doesn't move the way each individual representative would go, and in addition, it seems that government inherently is process- oriented instead of goal-oriented. She thought she could do more about that, but has found instead that any reform just adds more work. She cited an example of an insurance issue requiring seven notarized copies, and asked Commissioner Poe whether the agencies are talking and sharing things better compared to when she first was elected seven years ago. COMMISSIONER POE replied there is quite a bit of talking and sharing now. The goal of the private sector is to make money, while the goals of government are varied between the agencies which presents the problems. In reference to the seven notarized copies, the Administration is starting to move in the direction of efficiency. He cited the Division of Motor Vehicles as an example whereby many transactions can be completed via the Internet. There is a problem with an electronic signature, but it is being solved elsewhere and there might be some statutory problems with it as well, but as the state moves in that direction costs can be reduced. In reference to agencies talking with each other, technology has improved to help with that. He cited E-mail as an example. He used to have only one in-basket and now he has three because of E-mail and voice messages. The Administration is looking at fish and game licenses over the Internet that might make some people angry. Don't be surprised if a sporting good store says, "Hey, wait a minute. That was an important part of bringing customers into the shop. I liked them having to come down and get the license at my shop." What seems to be good, and makes sense has an impact. Nevertheless, the Administration is working on that because it is the only way to continue to deliver services at a lower cost. Number 0518 REPRESENTATIVE KERTTULA remarked that Commissioner Poe has the broad mind to work on these types of issues. She asked him where the state is on the Y2K issue. COMMISSIONER POE replied the best thing with Y2K is that its funding is moving forward and that a lot of agencies have been working on it for some time. Many of the systems, therefore, are ready to go and are waiting on their contingency plans. He cited the plans for rural and international airports look good. In the next month there will be "table top exercises" to begin to think about how to respond to emergencies associated with Y2K. Alaska might have its act together and still be vulnerable because not much is produced here. Most items are shipped in, flown in or trucked in, via a supply line. He noted that there might be several small events on that specific date and some that might happen later because a delayed impact from the Lower 48 states. Those things need to be thought through. Number 0559 REPRESENTATIVE OGAN stated, in his opinion, there is an inherent disincentive to be a good steward of the people's money because no good deed goes unpunished. For example, a good administrator is penalized by the legislature for tightening that administrators' budget by not giving more money. He suggested an incentive program that rewards those who save money. COMMISSIONER POE replied there are ways to reward employees for good ideas and that has been around for a while. In 1983, as a member of the Administration, Governor Sheffield campaigned on the zero-based budgeting which is very difficult to work. Commissioner Poe said he designed an alternative budget system but it turned out to be one of his biggest disasters in his career, but he learned from that. To do substantive things sometimes two to three years, it takes a commitment to a long-range plan. He said, "If you can help me find a way to have the legislature also to adhere to that kind of an approach, maybe we can actually get there. And, that's not tossing it out to you, I'm just saying there's a lot of dynamics involved in that problem and none of us have really found a way to hold us to the same plan." REPRESENTATIVE OGAN mentioned there are a few state employees that are not carrying their load, and there's probably more that do more than their share. He indicated the Administration's hands are tied, that they can't really fire somebody unless there is gross incompetence. He asked is there something that you can negotiate in the contract, or some kind of methodology to raise the level. COMMISSIONER POE replied that problem gets dealt with on several levels, the first is the management over that employee. You can fire state employees, you have to want to do it, you have to commit to doing it. It can be done, and it should be done when somebody isn't performing. COMMISSIONER POE said some mangers give an employee a good review and hopefully they'll go to work for somebody else and won't have to go through all that effort to move them out. He said he thinks this approach is dishonest, that you have to handle the problems that you have to handle. Number 0648 COMMISSIONER POE referred to the labor contracts that are in the process of negotiating that also allows management to open up to elements that are contracted that they would like to talk about. It allows the union to open up to elements other than wages and benefits. Yes, in that area, you can begin to discuss some of those harder issues. In reality, you have to give something to get something. Yes, there are some things you can negotiate. CHAIR JAMES mentioned she had the same conversation with Fate Putman. She cited her private business as an example - you have to notify them when they do something wrong and you have to put that in their files to establish a record. Number 0673 REPRESENTATIVE HUDSON moved to forward the confirmation of Commissioner Poe. There being no objection, it was so ordered. HB 80 - EMPLOYMENT PREFERENCE FOR NAT'L GUARD Number 0684 CHAIR JAMES announced the next order of business is HB 80, "An Act relating to a state employment preference for certain members of the Alaska National Guard." Number 0691 [Malfunction - tape jammed]. REPRESENTATIVE CARL MORGAN stressed that he would like HB 80 introduced as is, without amendments. TAPE 99-10, SIDE A Number 0001 CHAIR JAMES called an at-ease at 8:53 a.m. and called the House State Affairs Standing Committee back to order at 8:54 a.m. Number 0012 BRUCE GAZAWAY, President, Alaska National Guard Enlisted Association, testified via teleconference from Anchorage. He reported that the National Guard totally agrees with the three-point preference. Number 0018 BRUCE GABRYS, President, Alaska National Guard Officer's Association testified via teleconference from Anchorage. He stressed that he would also like HB 80 to pass out of committee with the three-point preference. It does recognize the contribution of the National Guard service without diminishing, or placing it on par with the contributions of veterans who served during the time of war, and/or was disabled, or was a prisoner of war. MR. GABRYS noted HB 80 does have the veterans' support at the three-point level. He indicated it would take a considerable amount of work to elevate that to five points. MR. GABRYS said the Department of Administration raised concerns about the applicant's scores. He said he felt the illustration presented is unrealistic in that it proposed a false dilemma. For example, the veteran applicants were over-represented in the model. It also made an assumption that 50 percent of the veterans that were applying, with the ten-point preference, would have meant that they were either disabled or a prisoner of war. MR. GABRYS further explained, of the four veteran applicants listed, two are scored without the preference points with a perfect 100-score, and two scored at 90 points in the example. Under this scenario, the veterans are on the reachable list, with or without any preference points. He said he didn't believe that is representative of the population pool of applicants. MR. GABRYS said the preference points are to assist veterans that are primarily in the range of the 70-85 point level and are reachable and eligible to gain an interview. MR. GABRYS pointed out the scoring of applicants are listed in five-point increments. Unless Workplace Alaska has changed the scoring system, an applicant under the previous system could score an 87-point total, with the additional three-points as proposed by HB 80, would be given a score of 90. This would qualify the applicant eligible for an interview. Previously, without the three-point preference, that applicant would not have been eligible for an interview. MR. GABRYS urged the committee to pass HB 80 with the three-point preference. He remarked, "If there are concerns with Workplace Alaska integration, that would have to be addressed outside of this forum on an administrative basis." Number 0097 REPRESENTATIVE SMALLEY offered Amendment 3. Page 2, line 12, delete three and insert five. In an examination to determine the qualification of applicants for the classified service under merit system examination, [three] five points shall be added to the passing grade of a member of the national guard. REPRESENTATIVE HUDSON objected. REPRESENTATIVE SMALLEY said it would appear to create fewer problems or concerns and allows more flexibility. He indicated he hasn't heard any essential problems with diminishing the service of the veterans versus the National Guard. It makes the system cleaner and more inductive. REPRESENTATIVE HUDSON mentioned members of the National Guard object to the amendment, and the committee hasn't heard from the active duty individuals. He said he believes HB 80 is a good incentive and it would serve the purpose at three; if it is moved to five, there is a good chance that it will not pass. CHAIR JAMES disagreed that this would diminish the ability to hire minorities because of the high number of minorities in the National Guard. A roll call vote was taken. Representatives Kerttula and Smalley voted for the amendment. Representatives James, Ogan, Whitaker, and Hudson voted against it. Therefore, Amendment 3 failed by a vote of 2-4. Number 0174 REPRESENTATIVE SMALLEY offered Amendment 4, page 3, lines 18-21 Delete: If all job qualifications are equal, a member of the national guard shall be given preference over a person who was not a veteran, prisoner of war, or member of the national guard, and the member of the national guard shall be kept on the job. REPRESENTATIVE OGAN objected. REPRESENTATIVE SMALLEY indicated it creates a large number of people that have bumping rights. A veteran that is disabled, or a prisoner of war, is a small group of people. When you're talking about the bumping preference for approximately 12 percent of the state workforce, you're talking about a tremendous amount of people that impact that process. He noted they still have preferential points in the overall process. CHAIR JAMES pointed out that Fate Putman, Alaska State Employees Association, said that it's all right to leave the sentence in the bill. REPRESENTATIVE SMALLEY remarked that he also had the same conversation with Mr. Putman and he said that he believes that it should be deleted. REPRESENTATIVE HUDSON mentioned he didn't want this legislation to involve itself in the standard job retention or bumping privilege. He indicated that he agrees with Representative Smalley and referred to line 17 which refers to the elimination of a position: If a position of the classified service is eliminated, employees shall be released in accordance with the rules that give due effect to all factors. REPRESENTATIVE HUDSON mentioned the following text would be retained: This subsection may not be interpreted to amend the terms of the collective bargaining agreement. REPRESENTATIVE HUDSON said the terms and conditions of the bargaining agreement would signify who would be retained and who wouldn't be. He indicated he would support this amendment. Number 0263 REPRESENTATIVE WHITAKER asked Representative Smalley to explain the 12 percent in the context it was given. REPRESENTATIVE SMALLEY replied he was using the data that was provided at the previous hearing - approximately 12 percent of the state workforce are veterans. In his opinion, the 12 percent allows bumping to an expanded group of people and opens up that classification. He reiterated that the intent is primary to make sure they get the interview. Those protections are there without that sentence being in there. REPRESENTATIVE KERTTULA agreed with Representative Smalley. REPRESENTATIVE OGAN indicated he would support the amendment and further stated that this is to get their foot in the door. He said, "Again, I wish we could amend the whole bargaining agreement, the people to go first are the people that aren't doing a good job." REPRESENTATIVE WHITAKER asked Representative Morgan for his comment on the amendment. Number 0302 REPRESENTATIVE MORGAN noted he didn't want the language deleted because the same language is included - on the top - for the veterans. He remarked no one has been unfairly bumped and a system is already in play for the veterans. REPRESENTATIVE SMALLEY referred to lines 3-6 and remarked that he believes it's a smaller group of individuals in that process. He further stated, "And, I think down here, the sentence opens it up to a very large group and I think the original intent was just to get them to that process, to get them to the interview. I think those other protections are there without that sentence being in there. And again, it's not to diminish the service, but not to put that large of a category of people in that potential bumping process." CHAIR JAMES asked Mr. Gabrys what percentage of guardsmen are also veterans. MR. GABRYS replied, throughout the guard, you're probably in the 20-30 percent bracket of current guardsmen who are in some for a veteran. REPRESENTATIVE HUDSON asked for a further explanation of what has been added to Section 2. CHAIR JAMES reiterated the changes made in the provision. CHAIR JAMES called a brief at-ease at 9:14 a.m. and called them back to order at 9:15 a.m. Number 0377 CHAIR JAMES asked for a roll call vote on Amendment 4. Representatives Ogan, Hudson, Smalley, Whitaker and Kerttula voted in support of it. Representative James voted against it. Therefore Amendment 4 passed by a vote of 5-1. Number 0387 REPRESENTATIVE HUDSON moved to report CSHB 80 (STA), with individual recommendations and attached fiscal note. There being no objection, it was so ordered. HB 45 INITIATIVE/REFERENDUM PETITIONS HJR 7 CONST AM: INITIATIVE/REFERENDUM PETITIONS Number 0403 CHAIR JAMES announced the next order of business is HOUSE BILL NO. 45, "An Act relating to initiative and referendum petitions; and providing for an effective date," and HJR 7, "Proposing an amendment to the Constitution of the State of Alaska relating to initiative and referendum petitions." CHAIR JAMES asked Representative Ogan if he was still interested in proposing an amendment. REPRESENTATIVE OGAN replied no. CHAIR JAMES noted Representative Coghill informed her that, if there was an effort to reduce the number of folks in each district, that we would also indicate the numbers of districts. She said he felt the 10 percent and the three-quarters is the proper balance. CHAIR JAMES noted messages from Michelle Keck and David Karalunas are on file. All members have received a copy. Number 0432 REPRESENTATIVE HUDSON moved to report CSHB 45 (STA) out of the committee with individual recommendations and with accompanying fiscal note. There being no objection, it was so ordered. Number 0442 REPRESENTATIVE HUDSON moved to report CSHJR 7 (STA) out of committee with individual recommendations and the accompanying fiscal note. There being no objection, it was so ordered. ADJOURNMENT Number 0452 There being no further business before the committee, the House State Affairs Standing Committee meeting was adjourned at 9:22 a.m.